Republicans want TARP money back

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Sen. John Thune introduced legislation last week that would force the feds to end ownership of private firms by July 1, 2010, and would bar any future use of TARP money to acquire new ownership shares.
John Shinkle

If President Barack Obama thought Republicans would give him a break — or maybe even a little credit — for the Treasury Department’s recent announcement that 10 banks were allowed to repay their federal bailout funds, he can think again.

Republicans in both chambers are calling for the White House to develop an “exit strategy” for the Troubled Asset Relief Program, the $700 billion rescue plan conceived by the previous administration.

The Treasury announcement that 10 banks can repay their TARP funds has not quelled GOP complaints that a bailout-happy Obama is irresponsibly running up the national debt; rather, they pounced on administration statements that the repaid money could be recycled to other struggling banks.

And the administration’s scheduled unveiling Wednesday of the details of its proposal to revamp the nation’s financial rules sets the stage for another round of complaints about how the White House has handled the rescue effort.

The continued disagreements over the financial rescue could trip up Obama as he attempts to turn his economic agenda toward the future — most notably by convincing Congress to commit to the massive spending his health care overhaul will require.

“Make no mistake: The cost of our health care is a threat to our economy,” Obama said Monday in a major speech to the American Medical Association, directly linking the issue to the country’s economic health.

And it’s not just Republicans who continue to grumble about TARP and the federal government’s involvement in private companies that the bailout has spurred.

Senate Finance Committee Chairman Max Baucus is asking for a full-scale audit of what the federal government is doing with companies that it’s taken a significant stake in as a result of the financial bailouts, complaining that such a report has not been delivered despite his request “nine long months ago.”

“We need to ensure proper systems are in place to allow government to get back to the business of governing as quickly as possible and struggling companies to emerge with health management and operations,” Baucus said in a statement. “That is the primary goal of the TARP program. It was a precondition of my support, and it’s what the millions of Americans still on the hook for these dollars expect.”

Treasury last week announced that 10 of the biggest banks that received TARP money, many under the prodding of then-Treasury Secretary Henry Paulson, would be allowed to repay the funds — a total of about $70 billion if it’s all paid back.

The development was cheered by those firms, and the administration touted it as a sign of financial recovery.

But it failed to satisfy GOP critics of the program, since the administration would not promise that the returned money wouldn’t be lent out again in future rescue operations.

On Friday, more than two dozen House Republicans, including the GOP leadership, sent Obama a letter — which was followed by a press release to the media — urging him to use the repaid TARP funds to “pay down the national debt and help restore lost confidence among American taxpayers.”

“This money is not a discretionary slush fund for the Treasury and the Obama administration,” said Sen. John Thune (R-S.D.). “Congress controls the power of the purse, and this money should be directed toward debt reduction. Treasury has greatly expanded the original intent of the TARP funds, and spending those funds that have been returned as they see fit is unacceptable and puts taxpayer dollars at greater risk.”

Readers' Comments (51)

Everybody knows it is about control. For the cost of keeping that money out of the treasury, the White House gains terrible influence over any bank with an outstanding liability to that program. The money is not President Obama's personal play money, it belongs to the taxpayers and most taxpayers overwhelmingly want the many repaid as soon as possible.

From the article: "...proposal to revamp the nation’s financial rules sets the stage for another round of complaints about how the White House has handled the rescue effort". ---------------- "Another round of complaints" is good phrasing here, as this is about all we are seeing coming from the Republican side of the aisle. Praise should be given both to the 10 banks and the Obama administration, for funds repaid. And yes, debt reduction should be our priority------ once we have two feet solidly on the ground, after recovering from this Republican-inspired financial deregulatory debacle.

From the article: "...proposal to revamp the nation’s financial rules sets the stage for another round of complaints about how the White House has handled the rescue effort". ---------------- "Another round of complaints" is good phrasing here, as this is about all we are seeing coming from the Republican side of the aisle. Praise should be given both to the 10 banks and the Obama administration, for funds repaid. And yes, debt reduction should be our priority------ once we have two feet solidly on the ground, after recovering from this Republican-inspired financial deregulatory debacle.

We know if OBAMA's Adm. sent this money direct to congress, the wrong wing nuts would complain about that. It matters not,what it is, the idiots will complain. If, tomorrow, the economy was as it was when cHENEY//bUSH took over, we would still hear: "It ain't right.", "Where's the rest of it?". "As the other party has control, we can't do with the money as we want." "Gee I know OBAMA must have it wrong.". The slime, who speak for the far wrong party, would still hang from between the tea bags and allow the droppings from the back side to get into the notional debate.

This story highlights a point that I do not think is fully understood by the American people.

The TARP money is less of a "bailout" and more of a loan. It is probable that not all of the money will be paid back, but as long as these financial institutions live on, most of it should.

I also think it would be unwise for the administration to automatically return the money to the treasury. This recession is not over, and those funds should be kept in a reserve to use as nessissary.

The GOP is just complaining to complain. They can do little else. If and when the administration does reuse those funds, the GOP could then try and make a point on the merits of the useage. However, at this point, they are just whining.

The continued disagreements over the financial rescue could trip up Obama as he attempts to turn his economic agenda toward the future — most notably by convincing Congress to commit to the massive spending his health care overhaul will require.

this isn't some mere disagreement- it's GOP "i hope he fails" ver 2.0. it's really a nuisance to pubbies to have to watch good governance since they're so horrible at it. just a couple of months ago they insisted geithner had no plan and were calling for his head. some pubbies were inisting the DOW would fall below 5000. today the DOW is showing increasing signs of shaking off its jitters and the banks are back to lending, repaying TARP funds. foreclosures are starting to ease and people are buying homes again. we have an orderly take down of chrysler rather than a reckless crash that would have taken the ENTIRE industry with it- as well sending the economy deeper into recession or depression.

face it, you guys hate the fact that obama's mojo is not only working but you can't touch it. how pathetic, the GOP will attempt once more to undermind the recovery from the recession they are largely responsible for. you insist that the obama administration are running the companies yet when they didn't stop bonus payouts you blow their socks off for not stoping them. why does the GOP taliban always try and have two different arguments using the same mouth??? oh, then there's simultaneous talking out their butts. accuse the administration of running corporate operations while you do all you can to destroy unions... still clinging to reagan, can't you folks go find a tar pit somewhere and just lay down quietly?

This story highlights a point that I do not think is fully understood by the American people.

The TARP money is less of a "bailout" and more of a loan. It is probable that not all of the money will be paid back, but as long as these financial institutions live on, most of it should.

I also think it would be unwise for the administration to automatically return the money to the treasury. This recession is not over, and those funds should be kept in a reserve to use as nessissary.

agreed!

the fact that TARP funds are being repaid and have been by some smaller institutions, puts the lie to the GOP spin, by distortion, that obama is "bailing out" banks and industry- a free-for-all to big biz on the backs of tax payers.

Everybody knows it is about control. For the cost of keeping that money out of the treasury, the White House gains terrible influence over any bank with an outstanding liability to that program. The money is not President Obama's personal play money, it belongs to the taxpayers and most taxpayers overwhelmingly want the many repaid as soon as possible.